It is no exaggeration that students who graduate from college these days from a private or state college to have over $30,000 in loans due. In addition, if the student decides to carry on and get a Masters Degree that number could easily go up to $50,000. We will not get into the PhD. realm or for post-graduate work for doctors, lawyers, and other highly skilled positions. However, the latter group will probably not have a problem paying their loans back after a while. The average college graduate more than likely will. Therefore, we offer a blog on debt help & student loans.
As a rule of thumb, since you are given a 6-month leeway before the first loans are usually due, your debt load should not be more than your first years’ annual salary. Because the job market is not what it once used to be, college graduates are turning towards a Chapter 13 bankruptcy to get out from under their debt. A Chapter 13 bankruptcy, as mentioned in our blog back in June and available here is basically a reorganization of your debt. This has usually been reserved for businesses both small and large, however more and more graduates are taking this step to help them with having to pay back this massive amount of debt.
Of course, like any type of bankruptcy, there are many downfalls to this approach.
- You have to pay back the loan within 5 years or 60 months. Most student loans go on indefinitely so long as you keep paying interest on your loan. They love you.
- You are not allowed to file a Chapter 7 bankruptcy for student loan debt, which basically wipes out all of your debt. However you have to qualify for this as well.
- It does get reported on your credit report, which can be a drain when you are trying to find work, as employers look at a bankruptcy as some with a high degree of risk.
- Roughly 50% of these debts never end up getting paid back, which could give the borrower another black eye, not to mention the attorney fees that are involved. Nationwide Debt Reduction highly recommends against using a Chapter 13 bankruptcy unless absolutely necessary. Most student loan programs offer either a forbearance or deferment on these loans to help them get to pay this debt back.
To learn about this post, or if you are in need of help regarding your debt, please feel free to contact Nationwide Debt Reduction, Inc. (NDR) toll free at 1-800-890-6658. Our professional advisors will be more than happy to answer your questions. If it is after hours (8:00 am -5:00 pm PST) (11:00 am – 8:00 pm EST) you may go onto our Contact Us website by clicking here, fill out a short form, and one of our advisors can get back to you when it is most convenient for you. We are located in the city of Mesa, Arizona in the Phoenix metropolitan area.